Is the labor of the owner deductible for rental property expenses?

The labor of the owner of rental property is generally not deductible as a rental property expense. This is based on IRS rules which do not allow owners to deduct the value of their own labor on the property. The rationale behind this is that deductions are typically allowed for actual cash expenditures or out-of-pocket expenses incurred in the production of income, and unpaid labor does not qualify under this definition.

As such, while expenses incurred for necessary services, repairs, or improvements can be deductible, the personal labor provided by the property owner does not represent a cash outflow and, therefore, is not eligible for a deduction. This helps ensure that deductions are focused on measurable and reportable expenses that influence the financial outcome of the rental activity.